Last week's gasoline demand increased more than 4% from the previous week to reach the highest level in three months, the Energy Information Administration reported Wednesday. Average gasoline demand over the past four weeks was 0.5% higher than a year ago.
In foreign exchange, the dollar fell against most rival currencies after the European Central Bank kept its interest rate unchanged at 1%. A weaker greenback tends to push up dollar-denominated commodities prices. See Currencies.
Crude for October delivery gained 51 cents, or 0.8%, to $68.56 a barrel on the New York Mercantile Exchange. Crude had hit $75 a barrel last week, the first time in 10 months, before staging a pullback.
"Gasoline demand appears to be rebounding at the end of the summer-driving season," said analysts led by Barbara Lambrecht at Commerzbank in a note. "This may have helped the oil price to return to $68 a barrel."
In its weekly petroleum report, the EIA said total petroleum products supplied, regarded as an implied gauge of demand, rose 1.2% to 19.7 million barrels a day, with daily gasoline demand jumping 4.1% to 9.48 million barrels, the highest since the week ended May 22.
Higher gasoline demand resulted in a sharp drop in U.S. inventories. Still, gasoline inventories were in the upper half of the average range for this time of year. See Wednesday's story.
Despite recent declines in crude and gasoline inventories, Phil Flynn, a senior market analyst at PFGBest, said that "oil is getting heavier and heavier as the market is heading into the weakest demand period of the year with more than ample supply."
Also in energy trading, October reformulated gasoline rose 0.3% to $1.8159 a gallon. October heating oil gained 0.4% to $1.7577 a gallon.
October natural gas fell 0.6% to $2.698 per million British thermal units.
The EIA is scheduled to release figures on last week's gas in storage later Thursday morning. Analysts surveyed by Platts expect the report to show inventories rising by 62 billion to 66 billion cubic feet from the prior week.
The United States Oil Fund (USO 35.40, +0.22, +0.63%) gained 1%, and the United States Natural Gas Fund (UNG 9.09, -0.36, -3.81%) fell 3.8%.
In economic news Thursday, the number of people filing for state unemployment benefits for the first time fell by 4,000 to a seasonally adjusted 570,000 last week, the Labor Department reported.
The figures come one day before the government reports on the August employment data. Economists surveyed by MarketWatch are looking for another sizable job loss of 250,000. The unemployment rate is expected to rise to 9.5%.
